Technology

Google challenges OpenAI’s calls for government A.I. czar

Published

2 years ago

June 13, 2023

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Kent Walker speaks at a “Grow with Google” launch event in Cleveland.

via Google

Google and OpenAI, two U.S. leaders in artificial intelligence, have opposing ideas about how the technology should be regulated by the government, a new filing reveals.

Google on Monday submitted a comment in response to the National Telecommunications and Information Administration’s request about how to consider AI accountability at a time of rapidly advancing technology, The Washington Post first reported. Google is one of the leading developers of generative AI with its chatbot Bard, alongside Microsoft-backed OpenAI with its ChatGPT bot.

While OpenAI CEO Sam Altman touted the idea of a new government agency focused on AI to deal with its complexities and license the technology, Google in its filing said it preferred a “multi-layered, multi-stakeholder approach to AI governance.”

“At the national level, we support a hub-and-spoke approach — with a central agency like the National Institute of Standards and Technology (NIST) informing sectoral regulators overseeing AI implementation — rather than a ‘Department of AI,'” Google wrote in its filing. “AI will present unique issues in financial services, health care, and other regulated industries and issue areas that will benefit from the expertise of regulators with experience in those sectors — which works better than a new regulatory agency promulgating and implementing upstream rules that are not adaptable to the diverse contexts in which AI is deployed.”

Others in the AI space, including researchers, have expressed similar opinions, saying government regulation of AI may be a better way to protect marginalized communities — despite OpenAI’s argument that technology is advancing too quickly for such an approach.

“The problem I see with the ‘FDA for AI’ model of regulation is that it posits that AI needs to be regulated separately from other things,” Emily M. Bender, professor and director of the University of Washington’s Computational Linguistics Laboratory, posted on Twitter. “I fully agree that so-called ‘AI’ systems shouldn’t be deployed without some kind of certification process first. But that process should depend on what the system is for. … Existing regulatory agencies should maintain their jurisdiction. And assert it.”

That stands in contrast to OpenAI and Microsoft’s preference for a more centralized regulatory model. Microsoft President Brad Smith has said he supports a new government agency to regulate AI, and OpenAI founders Altman, Greg Brockman and Ilya Sutskever have publicly expressed their vision for regulating AI in similar ways to nuclear energy, under a global AI regulatory body akin to the International Atomic Energy Agency.

The OpenAI execs wrote in a blog post that “any effort above a certain capability (or resources like compute) threshold will need to be subject to an international authority that can inspect systems, require audits, test for compliance with safety standards [and] place restrictions on degrees of deployment and levels of security.”

In an interview with the Post, Google President of Global Affairs Kent Walker said he’s “not opposed” to the idea of a new regulator to oversee the licensing of large language models, but said the government should look “more holistically” at the technology. And NIST, he said, is already well positioned to take the lead.

Google and Microsoft’s seemingly opposite viewpoints on regulation indicate a growing debate in the AI space, one that goes far beyond how much the tech should be regulated and into how the organizational logistics should work.

“There is this question of should there be a new agency specifically for AI or not?” Helen Toner, a director at Georgetown’s Center for Security and Emerging Technology, told CNBC, adding, “Should you be handling this with existing regulatory authorities that work in specific sectors, or should there be something centralized for all kinds of AI?”

Microsoft declined to comment and OpenAI did not immediately respond to CNBC’s request for comment.

WATCH: Microsoft releases another wave of A.I. features as race with Google heats up

Technology

Week in review: Stocks hit records on inflation data, earnings — plus, we started a new name

Published

1 day ago

October 25, 2025

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Week in review: Stocks hit records on inflation data, earnings — plus, we started a new name

Technology

AI spending is boosting the economy, but many businesses are in survival mode

Published

1 day ago

October 25, 2025

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AI spending is boosting the economy, but many businesses are in survival mode

Cameron Pappas, owner of Norton’s Florist

Norton’s

For Cameron Pappas, owner of Norton’s Florist in Birmingham, Alabama, the artificial intelligence boom is a world away.

While companies like Nvidia, Alphabet and Broadcom are lifting the stock market to fresh highs and bolstering GDP, Pappas is experiencing what’s happening in the real economy, one that’s far removed from Wall Street and Silicon Valley.

Small businesses like Norton’s, and companies of all sizes in retail, construction and hospitality, are struggling from higher costs brought by the Trump administration’s sweeping tariffs, and as downbeat consumers reduce their spending.

“We’ve just got an eagle eye on all of our costs,” Pappas, 36, told CNBC in an interview.

Norton’s generated $4 million in revenue last year, selling flowers, plants and gifts to locals. To avoid raising prices, which could cause customers to flee, Pappas has been forced to get creative, reworking some of his designs.

“If a bouquet has 25 stems in it, if you reduce that by three to four stems, then you’re able to keep the price the same,” Pappas said. “It’s really forced us to focus on that and to make sure that we’re pricing things the best that we possibly can.”

Pappas’ story and many like it are being masked in the macro data by the power of AI. In the first half of the year, AI-related capital expenditures contributed to 1.1% of GDP growth, according to a September report from JPMorgan Chase. That spending outpaced the U.S. consumer “as an engine of expansion,” the report said.

Total U.S. GDP increased at an annual rate of 3.8% during the second quarter of 2025 after falling 0.5% in the first quarter, the Commerce Department said.

U.S. manufacturing spending has contracted for seven straight months, according to the Institute for Supply Management. And construction spending has been flat to down, due to high interest rates and rising costs. Cushman & Wakefield said in a report this month that total project costs for construction in the fourth quarter will be up 4.6% from a year earlier because of tariffs on building materials.

The stock market shows a similar disconnect between AI and everybody else.

Nvidia CEO Jensen Huang delivers the keynote for the Nvidia GPU Technology Conference (GTC) at the SAP Center in San Jose, California, U.S. March 18, 2025.

Brittany Hosea-Small | Reuters

Eight tech companies are valued at $1 trillion or more and, to varying degrees, are all tied to AI. Those companies — Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta, Tesla and Broadcom — make up about 37% of the S&P 500. Nvidia, with a $4.5 trillion market cap, accounts for over 7% of the benchmark’s value by itself.

Investors are giddy about the massive investments they’re seeing in AI infrastructure. Broadcom shares are up more than 50% this year after more than doubling in each of the prior two years, while Nvidia and Alphabet have jumped almost 40% in 2025.

That explains why the S&P 500 and Nasdaq are up 15% and 20%, respectively, reaching record highs on Friday, even as the government shutdown continues to cause economic angst.

Meanwhile, the S&P 500 subgroups that include consumer discretionary and consumer staples companies have increased by less than 5% year to date.

The latest troubling sign in the consumer market came on Thursday, when Target said it’s cutting 1,800 corporate jobs — the retailer’s first major round of layoffs in a decade. Target shares have plunged 30% this year.

“I think the message that the AI economy is sort of driving up the GDP numbers is a correct one,” Arun Sundararajan, a professor at New York University’s Stern School of Business, told CNBC in an interview. “There may be weakness in the rest of the economy, or not weakness, but there may be more modest growth.”

Investors will hear all about AI in the coming days, the busiest stretch of the quarter for tech earnings, and will be listening closely for additional guidance on capital expenditures. Meta, Microsoft and Alphabet report on Wednesday, followed by Apple and Amazon on Thursday.

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Nvidia’s stock over the last year.

Last month, Nvidia announced a $100 billion investment in OpenAI, a startup valued at $500 billion. The capital will help OpenAI deploy at least 10 gigawatts of Nvidia systems, which is roughly equivalent to the annual power consumption of 8 million U.S. households.

Shares of Advanced Micro Devices have doubled this year and soared more than 20% earlier this month after the chipmaker announced a deal with OpenAI, while Oracle has been on a tear of late due to its ties to OpenAI and the broader infrastructure buildouts.

“Are we sort of inflating the economy now, thereby setting ourselves up for a crash in the future?” Sundararajan said. He added that he’s not seeing signs that demand for AI infrastructure will slow anytime soon.

‘Tariff price management’

When it comes to local businesses, most only know about the AI gold rush from the news headlines. One in four small business owners are stuck in “survival mode” as they contend with challenges like rising costs and tariffs, according to a September KeyBank Survey. It’s a segment of the economy that routinely accounts for about 40% of the nation’s GDP.

Pappas’ flower shop was founded in 1921, and purchased by his dad in 2002. The business has survived the Great Depression, World War II and the Covid pandemic. Pappas said his father, who died in 2022, reminded him that these periods were “just another season” for Norton’s, and that such challenges come with the territory.

But Trump’s tariffs have created a whole new set of constraints, as roughly 80% of all cut flowers in the U.S. are imported from countries like Colombia and Ecuador, according to the U.S. Department of Agriculture.

More demand than supply gives companies an edge, Jim Cramer says

Published

2 days ago

October 24, 2025

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More demand than supply gives companies an edge, Jim Cramer says

“Supply constrained,” are the two of the most important words CNBC’s Jim Cramer said he’s heard so far during earnings season and explained why this dynamic is favorable for companies.

“When you’re supplied constrained, you have the ability to raise prices, and that’s the holy grail in any industry,” he said.

Intel‘s strong earnings results were in part because of more demand than supply, Cramer suggested. He noted that the company’s CFO, David Zinsner, said the semiconductor maker is supply constrained for a number of products, and that “industry supply has tightened materially.”

Along with Intel, other tech names that are also supply constrained and performing well on the market include Micron, AMD and Nvidia, Cramer continued.

These companies don’t have enough product in part because the storage needs of artificial intelligence are incredible high, Cramer said. He added that he thinks demand has overwhelmed supply because semiconductor capital equipment companies didn’t manufacture enough of their own machines as they simply didn’t anticipate such a volume of orders.

Outside of tech, Cramer said he thinks airplane maker Boeing and energy company GE Vernova are also supply constrained, adding that he thinks the former will say it’s short on most of its planes when it reports earnings next week. GE Vernova is supply constrained with its power equipment, like turbines that burn natural gas, he continued, which is the primary energy source for the ever-growing crop of data centers.

GE Vernova and Boeing are also set to be winners because they make big-ticket items that other countries can buy from the U.S. to help close the trade deficit, Cramer added.

“In the end, we have more demand than supply in a host of industries and that’s the ticket for good stock performance,” he said. “I don’t see that changing any time soon.”